Hyper-automation in the supply chain is a means, not an end

This article was originally published in Dutch by ITExecutive. It has been translated into English below.

Growing ecosystems and an expanding palette of increasingly digitized products and manufacturing processes require far-reaching supply chain automation. The increased scale and complexity presents organizations with considerable challenges in this regard, as was revealed at a recent roundtable meeting in Amsterdam. The challenge lies in several areas: systems, data and the organization as a whole.

Already during the kickoff of the lunch session, Suman Kumar Sengupta of event co-organizer Cognizant warned that this is no easy task. "Supply chain automation doesn't work in isolation. You have to approach it from the bigger picture," said the Manufacturing and Distribution Industries Client Partner for the Netherlands.

That insight was endorsed by the mixed company of tech leaders who had joined for the meeting led by long-term experience expert Hans Koolen (former Philips, BT and AT&T, now an independent consultant): from CTO to enterprise architect to supply chain manager. "By sharing vision and experiences, we don't all have to reinvent the wheel," he said.

Interconnector

According to Suman, in the current dynamic, those involved in technology, data and architecture play the role of ‘interconnector’ across the entire chain: from factory to end-customer. Everyone within this dynamic can benefit from an all-encompassing technology and data household – something Cognizant can provide if required. This also applies to co-initiator Amazon Web Services (AWS).

The American tech giant evolved from the global retailer automated to the extreme. “At AWS, everything is about the customer. Our use of AI, self-driving vehicles, robotics, drones and other high-tech has one goal: to deliver service excellence,” said Erik de Jager, Industry 4.0 expert at AWS. “We see technology and data as tools to best serve our customers’ wants and needs. For example, we offer them a fully insightful and transparent supply chain.”

The unique position of Amazon and AWS was recognized by participants- in particular noting that the digital-born company is a lot better off in terms of legacy than the average organization. At the same time, people around the table noted that the modernization of the IT landscape that is necessary for hyper-automation is a matter of culture, mindset and adoption. In other words: you really have to want it.

Business Value

Every transition is different. The speed and depth of technology adoption depends on people. A technology transformation on an industrial shop floor is very different from an application change in an organization populated primarily by office workers. “In terms of IT, a lot is possible, but organizational change takes a lot of time,” Cognizant’s Suman Kumar Sengupta stated. Something that can help, is taking an architectural approach. Take the far-reaching embrace of APIs, cloud-native technology and solutions that not only elevate IT itself, but above all, add business value.

To actually get things going, a company-wide, multidisciplinary dialogue is needed. For example, around specific use cases and the question of how to remain relevant as an organization in an increasingly digital future. And thus create value for yourself, for end-customers and any partners within the chains and ecosystems in which you operate. At that point, you will automatically be faced with strategic choices regarding technology and data.

Another thing that everyone at the table could agree upon is that cleaning up obsolete IT is the most prominent obstacle to overcome before reaching the dreamed-of supply chain automation. For that, convergence of IT and operational technology (OT) is crucial. The upcoming sustainability regulations and increasing malware attacks on industrial sites only make it more relevant for IT and OT teams to work together on this convergence. To achieve this, modernization of (part of) the landscape is crucial.

In addition, there is usually another challenge at play: mastering and getting the right quality of data. A 360-degree view of the customer is impossible without data that is both reliable, available and usable. Clear data ownership is consequently also fundamental.

Solutions

The right tools can also provide relief. Think of blockchain technology for traceable data, for example in the context of compliance with laws and regulations on sustainability, privacy and working conditions. Solutions for monitoring performance indicators and other objectives were also mentioned at the table.

Although varying in maturity, the roundtable participants are making clear progress in the data area. Regarding the supply chain, one of the things they are working on now and in the future is interoperable data that is available via APIs. This is going to provide both bottom-line (simplification and efficiency) and top-line (insight and the development of digital products and services) added value.

"These are two sides of the same coin," said De Jager of AWS. And while you won't get far purely on the basis of legacy IT, there are technical opportunities to make the existing landscape work more in an integrated way and as one. Finally, his co-host at Cognizant emphasized that a greater degree of internal and external interoperability is not primarily a technological task, but rather an organizational change process.

Both Cognizant and AWS have the experience, knowledge and tools to accelerate and facilitate that process. "Hyper-automation and supply chain digitization make the difference between winning or losing," Koolen concluded. "With the right partners, this doesn't even have to be very difficult."